Experiential purchases

 to a publicly accessible website, in whole or in part. 14. 3 Discussion Questions #1 1. Does customer satisfaction matter? Why or why not? 2. How do you determine whether you are satisfied? © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 4 Customer Evaluations (slide 1 of 3) • Customer evaluations include • Customer satisfaction • Perceptions of quality • Customers’ intentions to repurchase • Customers’ likelihood of word-of-mouth, etc. • Marketers track these evaluations because they impact the bottom line © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 5 Customer Evaluations (slide 2 of 3) • Customer Evaluations = Experience − Expectations © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 6 Evaluation Outcomes • If customers’ experiences • Surpass their expectations→ delighted • Meet their expectations→ satisfied • Fall short of their expectations→ dissatisfied • Low-involvement purchases • Evaluation is instantaneous • Expectations are usually latent • Higher-involvement purchases • Evaluation is deliberative and conscious © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 7 Customer Evaluations (slide 3 of 3) • Search goods • Evaluate obvious qualities; straightforward • Experiential purchases • Evaluate after trial/consumption • Expectations might not be fully formed; the experience shapes evaluation & expectations • Credence purchases • Don’t have expertise to evaluate • Evaluate what one can (price, looks, etc.) © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 8 Sources of Expectations • Personal experience • Consumers trust their own experience • Experience can be direct or indirect • Friends and experts • Trust those with no commercial gain • Marketing mix elements • Ads, price, retail atmosphere, etc. • Third-party communications • e.g., Consumer Reports, books, and Internet © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 9 Expectation and Experience • The core (hygiene factors) and peripheral components (motivating factors) of a product both contribute to satisfaction • If the core is good, it doesn’t enhance satisfaction much because it is expected to be good • If the core is bad, it can affect dissatisfaction • Peripheral services can affect both © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 10 Expectation & Experience: Flowcharts • Marketers create flowcharts that map all of the interactions between the customer and company • From the eyes of the customer • Flowcharts are used to • Generate quality measures at each stage • Identify points of repeated problems • Suggest system redesigns to improve efficiency © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 11 Types of Expectations • • • • Ideal levels of quality Predicted levels of quality Adequate levels of quality Zone of tolerance exists between the adequate and predicted levels of quality © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 12 Customer Value • Value • The trade-off of the quality of the purchase received compared to the price paid and other costs incurred • Marketers try to increase perceptions of value © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 13 Expectations • Expectations are dynamic • What pleased a customer last time may no longer suffice • Expectations vary cross-culturally • In individualist cultures, satisfaction is heavily influenced by quality of reliability and service provider responsiveness • In collectivistic cultures, satisfaction is heavily influenced by the relational aspects of frontline employees © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 14 Measurement • Measuring quality with precision is difficult • Customer perceptions can be measured with surveys • Compare results to previous or competitive benchmarks • Surveys that measure multiple facets of customers’ thoughts are more actionable © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 15 Customer Dissatisfaction • The primary means to regain a dissatisfied customer is through empowered frontline employees • Immediately redress the problem • Empathize with customer • Offer a perk for customer’s troubles © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 16 Customer Relationship Marketing (slide 1 of 2) • Customer satisfaction is first step in long-term relationship • Loyalty programs • Price discounts may keep customers from defecting while inducing additional purchasing • Some companies may assume loyal customers are price insensitive and charge them more © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 17 Customer Relationship Marketing (slide 2 of 2) • CRM programs track customer information including RFM information • Recency, frequency, and monetary values of customers’ purchase history • These factors are used to “score” customers to identify the most desirable customers © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 18 Discussion Question #2 • Describe the most desirable customers according to the figure. © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 19 Customer Database Information • • • • • • • Contact information Demographics Lifestyle and psychographic data Internet info Transaction data (RFM, etc.) Rate of response to marketing offers Complaints © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 20 CRM • CRM programs • Take planning and money • Require ongoing customer monitoring • Companies struggle to design an information system with desired qualities • Integrate inputs from all relevant customer touch points • Access information in useful formats for managerial usage © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 21 Customer Lifetime Value (slide 1 of 2) • Companies utilize customer lifetime value (CLV) to assess customers in terms of their worth to the company • Some customers are costly to acquire, others more costly to retain © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 22 Customer Lifetime Value (slide 2 of 2) © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 23 Customer Lifetime Value Example © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 24 Managerial Recap (slide 1 of 2) • Quality and customer satisfaction can be precisely measured for goods, but not as easily for services • Surveys can be used to ask customers for their evaluations of any purchase • Marketers care about loyalty and customer relationship management © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 25 Managerial Recap (slide 2 of 2) • Customer lifetime value is a means of translating marketing efforts into financial results • CLV allows firms to match customer benefits to revenues to ensure that each customer relationship remains profitable © 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. 26
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